With no bank stocks among its 61-stock lineup, CHXF looks like one of the more alluring China ETFs at the moment. That is not saying much, though. FXI is down 16.6% in the past month, but CHXF is down 11.8%. A loss of nearly 12% is nothing to crow about and it all shows is that CHXF was less bad than FXI.
Additional risks to CHXF and other China ETFs with large-cap exposure come from by way of those large-caps failing to comply with Beijing’s push to get dividends up to 30% of profits. Just 60% of the largest Shanghai-listed firms met that target, Josh Noble reports for the Financial Times.
Accentuating the risks to the China investment thesis is that it is a lack of dividends that is chasing investors into the overheating real estate and complex wealth management products that are one reason China’s banks needed the liquidity injection.
WisdomTree China Dividend Ex-Financials Fund
ETF Trends editorial team contributed to this post.